McKinsey Under US Opioid Probe

McKinsey Under US Opioid Probe

Introduction

McKinsey & Co. faces a criminal investigation in the United States concerning its alleged involvement in exacerbating the opioid epidemic.

Federal prosecutors are focusing on the consulting firm's advising of OxyContin maker Purdue Pharma and other drug companies, suspecting McKinsey of contributing to the marketing strategies that promoted the sales of prescription painkillers, leading to widespread addiction and fatal overdoses.

Both McKinsey and the U.S. Justice Department declined to comment on the matter. The investigation revolves around whether McKinsey engaged in a criminal conspiracy by advising Purdue and other pharmaceutical companies on marketing tactics to increase sales of opioids. Additionally, prosecutors are probing whether McKinsey participated in healthcare fraud, as its consulting work allegedly resulted in fraudulent claims to government programs like Medicare.

Moreover, investigators are examining whether McKinsey obstructed justice. This aspect of the inquiry pertains to McKinsey's acknowledgment of terminating two partners who discussed deleting documents related to their work on opioids. The probe, initiated several years ago, involves Justice Department officials from offices in Washington, Massachusetts, and Virginia. Both parties are engaged in discussions to resolve the investigation.

It's essential to note that investigations do not imply wrongdoing, and officials conducting the inquiry may pursue criminal charges, seek civil sanctions, or close the probe without further action. The scrutiny of McKinsey's past involvement with drugmakers underscores the enduring repercussions of its consulting work on opioids. The potential for criminal charges against the company or its executives, as well as substantial financial penalties, intensifies the stakes of this investigation.

Previously, McKinsey settled multiple opioid-related lawsuits with agreements totaling nearly $1 billion. These settlements addressed legal actions brought by all 50 states, Washington, D.C., U.S. territories, local governments, school districts, Native American tribes, and health insurers. In 2019, McKinsey announced it would cease advising clients on opioid-related businesses. None of the settlements involved admissions of liability or wrongdoing.

In response to inquiries, Purdue Pharma did not immediately provide a comment. The company pleaded guilty in 2020 to criminal charges related to its handling of opioid painkillers. Following its bankruptcy filing in 2019, Purdue negotiated a settlement valued at approximately $10 billion to resolve numerous lawsuits alleging its contribution to the opioid epidemic. However, the Supreme Court intervened in the settlement process, and a ruling on a Biden administration challenge to the deal is imminent.

Prosecutors have yet to make any charging decisions in the criminal investigation of McKinsey. The complexity of the case involves thorough examination of voluminous documents and ongoing discussions with McKinsey's legal representatives.